Thursday, June 16, 2011

Freedom in Kentucky

I had an opportunity to speak with the authors of the new Mercatus Center report, "Freedom in the 50 States." Here's the audio:

Jason Sorens

William Ruger

As you're probably aware, Kentucky landed in the bottom half of the rankings among the states. The advice the authors gave to Kentucky policymakers was fairly simple:
  • Tighten the rules for municipal-bond issuance and cut spending, particularly on grants to local school districts and employee compensation (repeal the prevailing-wage law), in order to retire debt.
  • Reduce homeschool recordkeeping requirements to a simple record of attendance, like Indiana and Tennessee require.
  • Dramatically raise contribution limits for grassroots PACs and individuals.
Interestingly, what brought Kentucky down was its score in economic freedom, where the state ranked 34th overall. The authors noted that Kentucky's fiscal structure means a large share of tax revenues go through Frankfort rather than through local governments.
There is no immediately compelling reason why Frankfort should be charged with collecting and spending such a large share of the commonwealth's total government revenues. It serves to prevent local government innovation in the delivery of services since Frankfort plays a greater role in funding and therefore controlling the direction of local projects. It also means that localities receive muted incentives to compete for a greater share of area populations through varying tax rates, service provision and local amenities.

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